The Mediating Effect of The Choice of Competitive Strategy on The Relationship of SMA Information Usage and Firm
Performance
Pu Zhao1, Raman Noordin1*, Stephen Laison Sondoh Jr1
1 School of Business and Economics, Universiti Malaysia Sabah Jalan UMS, 88400, Kota Kinabalu, Sabah, Malaysia
*Corresponding Author: [email protected],my Accepted: 1 June 2022 | Published: 15 June 2022
DOI:https://doi.org/10.55057/ajafin.2022.4.2.1
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Abstract: We investigated the matching relationship between the SMA information usage and the choice of competitive strategy based on the contingency theory, and tested the matching results through firm performance. In other words, we examined the mediating role of the choice of competitive strategy on the relationship between the SMA information usage and firm performance. The study collected data from 172 Chinese manufacturing firms by questionnaire and analyzed the data through PLS-SEM. Through the analysis results we found that when the product-related information usage and customer-related information usage matched with the choice of differentiation strategy, the firm was able to obtain better performance. In addition, the study found that the choice of cost leadership strategy mediated the relationship between the competitor-related information usage and firm performance, as well as the relationship between the use of product-related information and firm performance. This study provides suggestions for Chinese manufacturing managers to use SMA information for strategic decision making, at the same time, demonstrates the link between competitive strategy and SMA.
Keywords: SMA Information Usage, Competitive Strategy, PLS-SEM
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1. Introduction
Strategic management accounting (SMA) was introduced by Simmonds (1981) as a development of traditional management accounting (Ward, 1993) and is effective in helping companies gain a competitive advantage; SMA is external, market-oriented and provides managers with information about their competitors as well as information about the company's future long-term decisions (Lord, 1996). Most current SMA study has moved from refining the conceptual framework to investigating the results of firms' use of SMA (Noordin, Zainuddin, Mail and Sariman, 2015; Cadez & Guilding, 2008; Turner, Way, Hodari and Witternan, 2017;
Alamri,2019; Oboh & Ajibolade,2017; Pasch,2019; Oyewo,2022). While most of the empirical studies related to SMA are based on Guilding, Cravens and Tayles (2000). Although empirical study on SMA has never stopped and most of the empirical studies have confirmed the positive impact of SMA usage on firm performance improvement (Cadez & Guilding, 2008; Turner et al., 2017; Pasch, 2019; Oboh & Ajibolade, 2017), to date SMA still possesses a low utilization rate (Hadid and Al-Sayed,2021), therefore empirical studies on SMA are still of great importance.
This study is an empirical study related to SMA, and the manufacturing companies in Beijing, Tianjin and Hebei regions of China were selected as the study subjects. Since SMA can provide managers with information for strategic decision making (Tillmann, 2003), this study refers to the previous studies on the relationship between SMA and strategy, and chooses the contingency theory as the theoretical basis of this study (Cinquini & Tenucci , 2010; Turner et al., 2017; Cescon, 2019). The main reason for this is that company strategy acts as a contingency variable (Schoonhoven, 1981), allowing for an optimal matching relationship between the SMA information usage and the choice of competitive strategy. Therefore, this study investigates the mediating role of the choice of competitive strategy on the relationship between the SMA information usage and firm performance based on the contingency theory. Porter's (1980) model of competitive strategy is selected and focuses on the mediating role of the choice of differentiation and cost leadership strategy.
The study consists of five sections. The next section briefly reviews firm performance, the three dimensions of SMA information, the two types of competitive strategy and the relationship among the three,then generates the hypotheses for this study. Section three describes the study methodology, including the sample collection process, the measurement of variables and the choice of data analysis methods. Section four presents the results of the data analysis, and in section five the results of the analysis are summarised and discussed.
2. Literature Review and Hypothesis Development
2.1 SMA Information Elements
SMA can provide financial information about a company's product market and competitor costs and structure (Simmonds, 1981; Bromwich, 1990) and Guilding et al., (2000) argued that SMA should include not only the provision and analysis of product market and competitor information but also customer accounting. Therefore, Noordin et al., (2015) summarise all the elements included in SMA and argue that SMA can provide three dimensions of SMA information, which are product-related information, customer-related information and competitor-related information. These three dimensions are broadly derived from the 12 SMA practice summarised by Guilding et al. (2000).The information provided by SMA can be considered as a result of SMA practice according to the definition of SMA (Bromwich, 1990), and the information provided by using SMA can help managers to make strategic decisions (Tillmann, 2003).
Among the three dimensions of SMA information, product-related information includes product attribute cost information, brand valuation information, product quality cost information, product target cost information, strategic cost information, strategic pricing information, value chain cost information (Guilding et al., 2000), and product development cost information. Competitor-related information includes competitor cost structure information, competitor position monitoring information, competitor financial information (Guilding et al.,2000) and competitor technology and innovation information (Noordin et al.,2015).
Customer-related information is mainly derived from Guilding and McManus (2002) and includes information on customer profitability and changes in customer demand cycles.
2.2 Competitive Strategy
Competitive strategy can be divided into three types, differentiation strategy, cost leadership strategy and focus strategy (Porter, 1980), Porter (1980) believes that the acquisition of competitive advantage is inseparable from competitive strategy, in which differentiation strategy does not focus too much on the cost of the product, but mainly on the unique products
and services recognized by customers, through the improvement of product quality and customer service. In contrast, the cost leadership strategy focuses on the cost of the product, the production efficiency of the product, and the expansion of the product's market share with a cost advantage, thereby gaining a competitive advantage. In addition, the focus strategy focuses on the needs of a certain segment of customers through market segmentation to maximise product advantages. However, more studies have argued that focus strategy can be used in conjunction with differentiation strategy and cost leadership strategy, therefore, this study, in line with previous studies, only focuses on differentiation strategy and cost leadership strategy (Hermawan, 2021; Apraiz et al.,2020; Kharub et al.,2019; Sabihaini & Prasetio, 2020).
2.3 Firm Performance
Firm performance can often be used as an indication of a firm's competitive advantage, and there are frequent studies that focus on the relationship between competitive strategy and firm performance (Islami et al., 2020; Sabihaini & Prasetio, 2019) and the relationship between the SMA information usage and performance (Noordin et al., 2015; Cadez and Guilding, 2008;
Turner et al.,2017). Therefore, in this study, the same firm performance was selected as a test of the matching results between SMA information usage and the choice of competitive strategy based on the contingency theory.
Firm performance generally includes two dimensions: financial performance and non-financial performance (Jusoh & Parnell, 2008). Financial performance generally comes from the disclosure of the company's own financial situation, which is a measurement that can show the short-term financial situation of the company, and generally includes the profitability index ROA, ROE and the operating capacity index. The non-financial performance is usually presented as the financial performance. Non-financial performance is often used as a complement to financial performance and can provide some indication of the achievement of a company's long-term objectives and is therefore a key focus in management accounting (Chahal et al, 2020). Non-financial performance is closely linked to a firm's strategy and reflects the achievement of the firm's strategy through the firm's subjective self-assessment. Therefore, this study focuses not only on the financial performance, but also on the non-financial performance.
2.4 Hypothesis Development
According to the contingency theory, there is an optimal match between different dimensions of SMA information usage and different the choice of competitive strategy, and this optimal match can help firms to gain better competitive advantage.
Most previous studies have focused on the relationship between the SMA information usage and performance, suggesting that the SMA information usage can positively influence the improvement of firm performance (Noordin et al., 2015; Cadez and Guilding, 2008; Turner et al., 2017), but few studies have confirmed how the SMA information usage positively affects the improvement of firm performance. Moreover, according to the definition of SMA, it can provide managers with the information needed for strategic decision making (Tillmann, 2003).
Therefore, this study argues that the SMA information usage helps managers to make strategic choices and helps them to match optimal SMA information with competitive strategy to achieve better firm performance.
Previous study on competitive strategy also suggests that competitive strategy can be effective in improving firm performance (Islami et al., 2020; Sabihaini & Prasetio, 2019), but competitive strategy is usually used as a contingency variable that needs to be matched with a management information system to gain a higher competitive advantage. SMA is also an
accounting information system that can provide managers with strategy-related information (Lord, 1996). Therefore, the SMA information usage to match the choice of competitive strategy is important for the improvement of firm performance.
According to the introduction in 2.1, the SMA information usage is divided into three dimensions, and previous study has shown that customer-related information and competitor- related information have a positive impact on the choice of differentiation strategy, as differentiation strategy requires meeting specific customer needs and identifying and monitoring competitors at the same time (Cescon, 2019). This study argues that differentiation strategy require more access to information about one's own product itself, including product attribute costs, quality costs to help managers develop reasonable pricing strategy in order to obtain performance improvements while stabilising existing customers, as differentiation strategy focus on customers with unique needs. In addition,this study agree with the result from Cescon (2019).Therefore, this study makes the following hypotheses.
H1: Differentiation strategy mediates the relationship between product-related information usage and firm performance.
H2:Differentiation strategy mediates the relationship between competitors-related information usage and firm performance.
This study differently argues that the choice of differentiation strategy requires customer- related information usage and that only by understanding changes in customer needs and profitability can firms develop products or strategic pricing in response to changes in target customers and thus gain competitive advantage. This study therefore makes the hypothesis that H3: Differentiation strategy mediates the relationship between customer-related information usage and firm performance.
In contrast, cost leadership strategy focus more on the product's own cost structure and use cost advantages to enhance product competitiveness (Porter, 1980). Therefore the choice of cost leadership strategy requires the product-related information usage and therefore, this study makes the hypothesis that
H4: Cost leadership strategy mediates the relationship between product-related information usage and firm performance.
For competitor-related information, the same is relevant to the choice of cost leadership strategy. Since a cost leadership strategy requires a product to have an advantage in cost structure over competitors' products, the cost structure of competitors' products requires a great deal of attention. In addition, customer-related information usage may have a positive impact on the choice of cost leadership strategy because cost leadership strategy is based on low prices of products to gain a competitive advantage, so the changes of the products’ price may match the customers’ capability and needs. Therefore, this study makes the hypothesis that
H5: Cost leadership strategy mediates the relationship between competitor-related information usage and firm performance.
H6: Cost leadership strategy mediates the relationship between customer-related information usage and firm performance.
3. Study Method
3.1 Sample and data collection
The sample for this study was drawn from manufacturing companies above the scale in the Beijing-Tianjin-Hebei region of China (see http/data.stats.gov.cn for a list) using a simple
random sample, taking into account that SMA and competitive strategy, as core strategic elements of a company, are not fully understood by all employees. A total of 540 questionnaires were distributed via social media and email to accountants, CEOs or CFOs. 190 responses were received, representing a response rate of approximately 35%. 172 usable samples were collected, excluding incomplete responses. To test the efficacy of our analysis, we used G- Power to calculate the minimum sample size required for this study and found that a sample size of 172 met the minimum sample size required for the 0.80 efficacy of social science.
Table 1 presents basic information about the respondents, and the study classified all sample firms by industry based on the Chinese government's 2012 industry classification criteria for manufacturing firms in China. The majority of the sample firms were found to be concentrated in the Energy Processing Industry, Energy Manufacturing and Material Processing Industry, and the majority of firms were focused on the local market, accounting for 83.14% of the total sample. The majority of respondents were accountants, accounting for 96.51% of the total respondents, and the respondents' years of experience ranged from 2 to 4 years, indicating that the majority of respondents were well informed about the strategic planning of the company.
Table 1: Sample characteristics
Industry name Frequency Percentage
Energy Processing Industry 58 33.72%
Energy Manufacturing 49 28.49%
Material Processing Industry 49 28.49%
Material Manufacturing 7 4.07%
Equipment manufacturing 9 5.23%
Local market only 143 83.14%
Export market only 12 6.98%
Both local and export market 17 9.88%
Less than RMB 5 mil 128 74.42%
RMB 5 mil – RMB50 mil 38 22.09%
RMB 50 mil and above 6 3.49%
CEO 5 2.91%
CFO 1 0.58%
Accountant 166 96.51%
Less than two years 58 33.72%
2 - 4 years 92 53.49%
5 - 7 years 23 13.37%
More than 7 years 3 1.74%
3.2 Measures
This study aims to investigate the mediating effect of the choice of competitive strategy on the relationship between the SMA information usage and firm performance. Therefore, firm performance was used as the dependent variable in this study, and this study built a 10-item scale based on the Likert-7 scale with reference to previous studies (Cadez & Guilding, 2012, Noordin et al., 2015; Alamri, 2019). For the independent variable SMA information usage, a
21-item scale was created, including eight items for product-related information usage, five items for competitor-related information usage and eight items for customer-related information usage (Guilding et al., 2000; Guilding and McManus, 2002. Noordin et al., 2015), where 1 indicates no use and 7 indicates a lot of use. The mediating variable in this study is the choice of competitive strategy, which includes the choice of differentiation strategy and the choice of cost leadership strategy, where for the measurement of the choice of differentiation strategy, this study also builds a 6-item scale based on the Lokert-7 scale (Morgan et al ,2004;
Panwar et al,2016; Zheng and Li,2011), while for cost leadership strategy, this study built a 4- item scale with reference to previous studies (Shi et al. ,2011; Morgan et al ,2004; Panwar et al,2016; Zheng and Li,2011), in which the structure of 1 indicates never concern and 7 indicates very concern (See Appendix 1).
4. Result
This study investigates the mediating effect between the SMA information usage by competitive strategy and firm performance. The study relied on partial least squares structural equation modelling (PLS-SEM) to test the hypotheses. PLS-SEM has the advantage of requiring a small sample size of just over 100 samples, and the total sample size of 172 in this study met the minimum sample size requirement of PLS-SEM. It is also possible to verify the mediation effect simply by testing the path coefficient (Hair et al., 2017).
4.1 Measurement Model Assessment
As all the constructs in this study are reflective constructs, reliability (CR), reliability of indicators (Loadings), convergent validity (AVE), discriminant validity (HTMT) and co- linearity (VIF) need to be measured in the measurement model assessment (Hair et al.,2017).
The reliability of all the constructs in this study exceeded the required minimum value of 0.7.
In addition, the loadings of most of the constructs met greater than 0.707, but there were items below 0.707 for each item of the firm performance construct, such as FP1, FP3 and FP4, but since the reliability was 0.901 and the loadings were not far from the threshold of 0.707, this was retained in this study. However, these three items were retained in this study due to the reliability of 0.901 and the fact that the loadings were not far from the threshold of 0.707. The convergent validity of the model was assessed by item loading, composite reliability for each scale and the mean variance extracted for each construct (AVE). According to Hair et al. (2017), the minimum value of AVE is 0.5, a structure AVE value above 0.5 can be considered as a model having appropriate convergent validity. According to Table 2 it can be found that the AVE values of all structures exceed 0.5.
Table 2: PLS factor loadings, CR and AVE
Loadings CR AVE
FP1 0.676 0.901 0.504
FP2 0.712
FP3 0.67
FP4 0.658
FP6 0.708
FP7 0.783
FP8 0.74
FP9 0.711
FP10 0.718
DIFF1 0.892 0.951 0.795
DIFF2 0.912
DIFF3 0.837
DIFF4 0.909
DIFF5 0.906
COST1 0.929 0.955 0.843
COST2 0.89
COST3 0.921
COST4 0.932
COM1 0.903 0.95 0.79
COM2 0.874
COM3 0.891
COM4 0.89
COM5 0.888
CUS1 0.89 0.96 0.75
CUS2 0.885
CUS3 0.908
CUS4 0.865
CUS5 0.817
CUS6 0.825
CUS7 0.862
CUS8 0.872
PRO1 0.87 0.962 0.761
PRO2 0.877
PRO3 0.845
PRO4 0.845
PRO5 0.912
PRO6 0.887
PRO7 0.881
PRO8 0.858
*FP=Firm Performance;COST=The choice of cost-leadership strategy;DIFF=The choice of differentiation strategy;COM=Competitors related information usage;CUS=Customer related information usage;PRO=Product related information usage
Henseler et al. (2016) suggested using HTMT to test the discriminant validity of the measurement model and when the value of HTMT is higher than 0.9 it indicates a lack of discriminant validity between the constructs. Table 3 shows the discriminant validity between the constructs in this study and it can be found that the discriminant validity between all the constructs does not exceed 0.9. Therefore, it can be concluded that the constructs in the measurement model.
Table 3: HTMT of Samples
COM COST CUS DIFF FP PRO
COM
COST 0.631
CUS 0.67 0.62
DIFF 0.507 0.631 0.672
FP 0.632 0.697 0.728 0.65
PRO 0.62 0.68 0.734 0.636 0.777
In this study, the co-linearity between the structures in the measurement model was measured using the variance inflation factor (VIF). As shown in Table 3, the VIF values between all structures were less than 5, so there was no co-linearity problem.
Table 4: VIF of Samples
COST DIFF FP
COM 1.796 1.796 1.95
COST 2.125
CUS 2.301 2.301 2.598
DIFF 1.981
PRO 2.101 2.101 2.459
4.2 Structure Measurement Model
In structural models, the explanatory power of the explanatory variables on the explanatory variables is usually judged by using R2 , we find that the adjusted R2 of the explanatory variables on the mediating variable the choice of differentiation strategy is 0.448, the explanatory power of the choice of cost-leadership strategy with an adjusted R2 of 0.486 and an adjusted R2 of 0.601 for the explanatory variable (the dependent variable), thus the explanatory variables in this study explain the mediating variable to a weak degree and the dependent variable to a moderate degree (adjusted R2 = 0.601 > 0.5).
We tested the hypotheses through the significance of the path coefficients. This study used a two-tailed test, bootstrapping of subsamples 5000, to obtain the matching relationship between SMA information usage and the choice of competitive strategy for each dimension. According to Table 4, we found that the choice of differentiation strategy positively mediates the relationship between the product-related information usage and firm performance (β=0.05, p<0.05), which is supported by H1. In addition, the match between customer-related information usage and the choice of differentiation strategy positively contributes to firm performance (β=0.066, p<0.05), so H2 is also supported. However, the competitor-related information usage did not gain competitive advantage through the choice of differentiation strategy, and therefore, competitor-related information was not suitable for the choice of differentiation strategy.
Table 5: Test results of structural models
β t-value P-value Hypotheses
PRO -> DIFF -> FP 0.05** 2.119 0.034 H1 Supported CUS -> DIFF -> FP 0.066** 2.121 0.034 H2 Supported COM -> DIFF -> FP 0.01 0.609 0.543 H3 Not Supported PRO -> COST -> FP 0.082** 2.324 0.02 H4 Supported COM -> COST -> FP 0.061* 1.851 0.064 H5 Supported CUS -> COST -> FP 0.032 1.267 0.205 H6 Not Supported
P value<0.1*,0.05**,0.01*** Two-tailed
The cost leadership strategy choice was able to positively mediate the relationship between the use of product information and firm performance (β=0.082, p<0.05) and the use of competitor information and firm performance (β=0.061, p<0.1), so H3 and H4 were also demonstrated.
However, customer-related information usage did not match with the choice of cost leadership strategy and did not significantly lead to improved performance.
5. Discussion and Conclusion
SMA as a development of traditional management accounting can help managers to make strategic decisions (Tillmann, 2003). According to the theory of variables, the optimal design of an organisation is dependent on judgements both internal and external to the organisation, and a number of variables such as the size of the organisation, the competitive environment, and the competitive strategy may influence the optimal design of the organisation (Schoonhoven, 1981). Similarly, SMA, as a management accounting information system, needs to provide information that matches the competitive strategy chosen by the firm in order to be able to help improve the firm performance.
This study analyses the matching relationship between the three dimensions of information that SMA can provide and the choice of competitive strategy. The purpose of this study is to provide recommendations for managers' strategic decisions and to clarify the relationship between the use of different dimensions of SMA information and the choice of differentiation strategy or cost leadership strategy, in order to help managers save time in information collection and processing, improve the efficiency of decision making and thus gain competitive advantage.
This study investigates the mediating role of the choice of competitive strategy on the relationship between SMA information usage and firm performance through least partial squares structural equation modelling (PLS-SEM). This study found that the product-related information usage and customer-related information usage matched with the choice of differentiation strategy can help managers improve their firm performance. According to the explanation of Guilding et al. (2000), product-related information includes the quality cost of the product, the attribute cost of the product. Since differentiation strategy focuses on product differentiation from most of the products in the market, additional profit is gained through quality and unique products (Porter, 1980). Therefore, the quality and attribute costs of the product and even the branding and advertising of the product contribute positively to the choice of differentiation strategy. Customer-related information is also important for the choice of a differentiation strategy, which is often directed at a segment of customers who have a need for the unique attributes of the product. This is in line with the findings of Cescon (2019).
In addition, this study confirms that matching the choice of cost leadership strategy with the product-related information usage and competitor-related information usage can improve firm performance. Cost leadership strategy help firms gain competitive advantage primarily by building cost advantages (Porter, 1980). Therefore, information such as product cost structure is important for the choice of cost leadership strategy. However, the matching relationship between customer-related information usage and the choice of cost leadership strategy has not been confirmed, mainly probably because most of the firms that choose cost leadership strategy do not pay attention to the demand variation of small-scale customers because of the large market share that already exists. It is worth noting that this study confirms that the competitor- related information usage and the choice of cost leadership strategy can help firms to improve their performance, for example, most firms that choose cost leadership strategy pay more attention to competitor-related information, including competitors' cost structure and financial situation. This is because a better understanding of the cost structure of the competitors is necessary to identify the cost advantage of the company and to obtain the optimal pricing strategy to maintain the existing competitive advantage.
In summary, this study finds that the product-related and customer-related information usage matches with the choice of differentiation strategy, in addition the product-related and competitor-related information matches with the choice of cost leadership strategy in Chinese
manufacturing firms, and provides suggestions for managers to use SMA information for strategic decision-making.
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Appendix A. Questionnaire
Questionnaires
Section 1- Measurement of Competitive Strategy
This section seeks the information about the competitive strategy characteristics emphasized by your company in quest for a favorable competitive position relative to your company’s competitors.
No Our company emphases on the following items in achieving the competitive advantage:(1=Not emphasized at all; 2=Little emphasized;
3=Less emphasized; 4=Emphasized; 5=More emphasized; 6=Much emphasized; 7=Strongly Emphasized)
1 Gaining a competitive advantage with high quality products.
1 2 3 4 5 6 7 2 Creating better customer value through
additional services.
1 2 3 4 5 6 7 3 Increasing advertising investment. 1 2 3 4 5 6 7
4 Building high-end brands. 1 2 3 4 5 6 7
5 Getting higher prices with products that are different from other manufacturers.
1 2 3 4 5 6 7 6 Obtaining low-cost raw materials from suppliers
to ensure cost advantages.
1 2 3 4 5 6 7 7 Pursuing high efficiency to reduce costs. 1 2 3 4 5 6 7
8 Pursuing economies of scale. 1 2 3 4 5 6 7
9 Focusing on the training of employees and the improvement of their skills.
1 2 3 4 5 6 7 10 Focusing on the development of new products or
product development.
1 2 3 4 5 6 7
Section 2- Measurement of SMA Information Usage
This section seeks the information about the extent of SMA information usage during the decision-making process in your company. (You can refer to the definition provided in the end of questionnaire.)
No Our company uses the following information continuously for strategic decision-making process: (1=Not used at all; 2=Little used; 3=Less used;
4=Used; 5=More used; 6=Much used; 7=Greatly used)
1 Product attribute cost information. 1 2 3 4 5 6 7 2 Product quality cost information. 1 2 3 4 5 6 7 3 Product target cost information. 1 2 3 4 5 6 7 4 Value-chain cost information. 1 2 3 4 5 6 7
5 Strategic cost information. 1 2 3 4 5 6 7
6 The information about strategic pricing. 1 2 3 4 5 6 7 7 Product brand valuation information. 1 2 3 4 5 6 7 8 The information about competitors’ performance
from the financial statements.
1 2 3 4 5 6 7
9 The information about competitors' technology and innovation investments.
1 2 3 4 5 6 7 10 The information about competitors’ cost. 1 2 3 4 5 6 7 11 The information about competitive position
monitoring.
1 2 3 4 5 6 7 12 Competitors’ brand evaluation information. 1 2 3 4 5 6 7 13 The information about customer lifetime
profitability.
1 2 3 4 5 6 7 14 The information about customer profitability. 1 2 3 4 5 6 7 15 The information about the customer loyalty. 1 2 3 4 5 6 7 16 The information about the cost of developing
products.
1 2 3 4 5 6 7 17 The information about the cost of customers. 1 2 3 4 5 6 7 18 The information of customer acquisition rate. 1 2 3 4 5 6 7 19 The information of customer satisfaction. 1 2 3 4 5 6 7 20 The information of changes in customer demand. 1 2 3 4 5 6 7 21 The information of customer retention rate 1 2 3 4 5 6 7
Section 3- Measurement of company Performance
This section seeks the performance of your company relative to the leading competitor in the same industry.
Please rate the performance of your company relative to your leading competitors within the same industry over the past three years.
NO Items of company Performance (1=Extremely Poor;2=Poor; 3=Little poor; 4=Average; 5=Good; 6=Very good; 7=Excellent)
1 The return on equity of our company (ROE). 1 2 3 4 5 6 7 2 The return on investment of our company (ROI). 1 2 3 4 5 6 7 3 The product sales and sales growth of our company. 1 2 3 4 5 6 7 4 The net profit of our company’s products. 1 2 3 4 5 6 7 5 The improvement of the quality of our employees. 1 2 3 4 5 6 7 6 Our company’ product meets consumer needs or
consumer satisfaction with the product.
1 2 3 4 5 6 7 7 The development level of our company’ own
product.
1 2 3 4 5 6 7 8 The quality of our company’s products. 1 2 3 4 5 6 7 9 The reduction of our company’s product costs. 1 2 3 4 5 6 7 10 The development of the new business in our
company.
1 2 3 4 5 6 7
Section 4- General Information
Our company is involved in... （According to the Nationality Economic Industry Classification,2019）
Industry name
Energy Processing Industry Energy Manufacturing Material Processing Industry Material Manufacturing Equipment manufacturing We focus on..
Local market only Export market only
Both local and export market
Local ______% Export ______%
Our average annual sales over the last three years were (approximates ONLY) Less than RMB 5 mil
RMB 5 mil – RMB50 mil RMB 50 mil and above
Now in the company my position is … CEO
CFO Accountant
Others (Please specify)
I have been in my present position for … Less than two years
2 - 4 years 5 - 7 years
More than 7 years
